Proceedings

 

 
IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF
RUSSELL MILLARD

STATEMENT OF ALLEGATIONS OF STAFF OF THE ONTARIO SECURITIES COMMISSION

Factual Background

1. CCI Capital Canada Limited ("CCI") was, at the material time, a corporation registeredpursuant to Ontario securities law as a mutual fund dealer.

2. Russell Millard ("Millard") is registered with the Commission to sell mutual fundsecurities. From February 1998 to March 1999 Millard was sponsored by CCI to sellmutual fund securities.

Amber Coast Resort Corporation

3. Amber Coast Resort Corporation ("Amber Coast") is a corporation organized pursuant tothe laws of Turks and Caicos Islands.

4. Amber Coast created two offerings for its securities which relied on separate exemptionsfrom the prospectus and registration requirements of the Act. No prospectus for AmberCoast was ever filed with or receipted by the Commission.

5. On September 1, 1998, Millard's sponsor, CCI, entered into an agreement to "place"$200,000 (U.S.) worth of units of Amber Coast by September 30, 1998 and an additional$400,000 (U.S.) worth of units by November 30, 1998 in exchange for fees and use of aluxury villa.

6. Although CCI was never registered as a limited market dealer, CCI encouraged its salesrepresentatives, including Millard, to sell units of Amber Coast to their clients.

7. Millard sold units of Amber Coast to two of his clients. In total, those clients invested$110,000 (U.S.) in Amber Coast.

8. CCI paid referral fees of 5% of the monies invested to Millard by way of commissioncheques.

9. As he was in the business of trading in securities, Millard required registration to selllimited market products in order to sell units of the Amber Coast offering. Millard wasnot licensed to sell limited market products thus his sales to clients constituted tradingwithout registration.

Conduct Contrary to the Public Interest

10. The conduct of Millard was contrary to the public interest in that he sold shares of adistribution which relied on an exemption from the prospectus requirements. This tradingrequired a limited market dealer licence which Millard did not have. Accordingly, Millardengaged in trading without registration in contravention of subsection 25(1) of the Act.

11. Such other allegations as Staff may make and the Commission may permit.

DATED at Toronto, this 1st day of November, 2000.